Small Bitcoin Mining Sites Beat Massive Facilities—In the Right Context

Conventional wisdom says bigger is always better when it comes to industrial energy loads. A panel of Bitcoin mining executives at Bitcoin Park challenged that assumption, arguing that 100 one-megawatt sites can deliver more economic value than a single 100-megawatt facility, if you're targeting the right energy sources.

The debate centers on a fundamental tension in energy infrastructure: pure capex efficiency versus the ability to monetize stranded or underutilized assets. While large-scale facilities drive down per-kilowatt costs through economies of scale, distributed operations unlock revenue from energy that would otherwise have no buyer.

"If you're looking at it from a power generation perspective, absolutely a 100-megawatt site is far more economically efficient," acknowledged Taras Kulyk, a digital compute industry veteran. But he immediately added an asterisk: existing underutilized assets scattered across industrial facilities represent untapped economic opportunity that only distributed loads can capture.

Philip Walton of Gridless Compute framed the distributed approach as strategic gap-filling rather than inferior economics. "Bitcoin mining just gives us an incredible ability to fill in the gaps," he explained. "It's almost like putting paste on a wall to fill in all the little holes. And the truth is that's where you get the best economics." His company operates sites in remote Africa locations requiring two-day trips to reach, places where centralized infrastructure makes no economic sense.

Steve Barbour of Upstream Energy pointed to massive embedded capacity in existing infrastructure that large facilities can't access. He estimated 100,000 natural gas generators across oil and gas facilities currently run underutilized. "Engineers oversize microgrids because you don't want to run out of power," he said. Adding Bitcoin mining loads to these existing generators improves their heat rates and dilutes maintenance costs per kilowatt-hour, economic gains that don't appear on a clean-sheet facility comparison.

The counterargument isn't purely about capex. Large facilities offer advantages in power quality, thermal management, and operational complexity. Kulyk noted that developing 100 separate one-megawatt sites creates exponentially more logistical and management overhead compared to a single large installation. For companies optimizing around traditional metrics like return on capital, consolidation makes.

Yet, the participants argued that framework misses Bitcoin mining's unique value proposition as what Kulyk called a "buyer of first resort," a load that creates economic offtake where none existed before. Walton emphasized this point through the lens of zero-marginal-cost energy sources like hydro or geothermal. "When you have an energy asset and you've invested in the capex and you're not having to pay a direct cost for the fuel, then why would you not sell it almost no matter what the price to a buyer that's willing to pay you today, no questions asked?" he asked.

The distributed versus centralized question becomes even more complex when extended to AI and high-performance computing loads now competing for the same power infrastructure. Barbour expresses skepticism about replicating distributed Bitcoin mining approaches with HPC, citing bandwidth and uptime requirements. But Walton suggested inference workloads, as opposed to training, which could eventually work in distributed, off-grid contexts where low latency to end users matters.

Whether the industry moves toward consolidation or distribution likely depends on which energy sources dominate future growth. If new power generation comes primarily from large-scale nuclear or utility-scale renewables, centralized facilities win. If growth comes from monetizing stranded assets embedded in existing industrial infrastructure, the distributed model proves more valuable.

"Bitcoin mining is about getting the cheapest source of energy possible," Walton concluded. "And a lot of times those cheap sources of energy are not going to be 'here's 100 megawatts that nobody's using.' It's going to be 'here's 100 sites with one megawatt that's not being utilized.'" The question isn't which approach is superior in the abstract, but which energy sources each model can unlock.